Epstein Secrets

ors —2011 Worst Performance Sectors Payout Ratios are at Historic Lows Jan-10 Apr-10 Source: Bloomberg, As of 1/4/12 Jul-10 Oct-10 Jan-11 9 Utilities, Healthcare, Telecom I Financials, Materials, Industrials Apr-11 Jul-11 Oct-11 Jan-12 J.P.Morgan EFTA_R1_02049751 EFTA02696373 Tactical Op

Performance Utilities 14.8% Consumer Staples 10.5% Health Care 10.2% Consumer Discretionary 4.4% Energy 2.8% Information Technology 1.3% Telecommunication Services 0.8% S&P 500 0.0% Industrials -2.9% Materials -11.6% Financials -18.4% S&P 500 YTD Market Return Distribution Source: Bloomberg, through 1

100.0% 28 46% 46% -2.1% -16.6% 14% 75% -5.1% -13.3% Telecommunication Services 100.0% 5 80% 20% 3.5% 15.3% 40% 20% -2.1% 12.3% Utilities 100.0% 29 52% 38% 0.3% -2.0% 21% 72% -4.6% -2.0% San* AS(S. Omesase I Figure 54: Fish hooks: S&P 500 quarterly btm-up EPS Figure 55: Cha

formation Technology 95.1% 66 68% 16% 6.4% 8.1% 39% 24% 0.6% 1.2% Materials 100.0% 28 46% 46% -2.1% -16.6% 14% 75% -5.1% -13.3% Telecommunication Services 100.0% 5 80% 20% 3.5% 15.3% 40% 20% -2.1% 12.3% Utilities 100.0% 29 52% 38% 0.3% -2.0% 21% 72% -4.6% -2.0% San* AS(S. Omesase

x 4.7% Industrials 0.2% Industrials 0.2% Materials -4.5% Energy Equipment & Services -11.6% Defensives 3.0% Information Technology 8.2% Utilities -6.116 013US8RTE (Reasonable PE Tech) • -10.1% Telecommunication Services 2.0% Consumer 8.6% Consumer Staples 3.7% Consumer Discretionary

5% Energy Equipment & Services -11.6% Defensives 3.0% Information Technology 8.2% Utilities -6.116 013US8RTE (Reasonable PE Tech) • -10.1% Telecommunication Services 2.0% Consumer 8.6% Consumer Staples 3.7% Consumer Discretionary 12.5% Health Care 4.8% Consumer Staples 3.7% Information Technology 8.2%

6.0% Industrials -4.9% Industrials -4.9% Materials -5.3% Energy Equipment & Services -3.5% Defensives -3.5% Information Technology -6.7% Utilities 7.3% DBUSBRTE (Reasonable PE Tech) • -17.4% Telecommunication Services 8.1% Consumer -4.8% Consumer Staples -1.5% Consumer Discretionary -

5.3% Energy Equipment & Services -3.5% Defensives -3.5% Information Technology -6.7% Utilities 7.3% DBUSBRTE (Reasonable PE Tech) • -17.4% Telecommunication Services 8.1% Consumer -4.8% Consumer Staples -1.5% Consumer Discretionary -7.3% Health Care -8.8% Consumer Staples -1.5% Information Technology

6.0% Industrials -4.9% Industrials -4.9% Materials -5.3% Energy Equipment & Services -3.5% Defensives -3.5% Information Technology -6.7% Utilities 7.3% DBUSBRTE (Reasonable PE Tech) • -17.4% Telecommunication Services 8.1% Consumer -4.8% Consumer Staples -1.5% Consumer Discretionary -

5.3% Energy Equipment & Services -3.5% Defensives -3.5% Information Technology -6.7% Utilities 7.3% DBUSBRTE (Reasonable PE Tech) • -17.4% Telecommunication Services 8.1% Consumer -4.8% Consumer Staples -1.5% Consumer Discretionary -7.3% Health Care -8.8% Consumer Staples -1.5% Information Technology

0% Financials 100.0% Health Caro 95.8% Industrials 99.4% Information Technology 99.1% Materials 100.0% Telecommunication Services 100.0% Utilities 100.0% Sows MSS Owns'sSink 487 402 446 422 8ot,S$STtiti EPS (% of of cal % beat % miss EPS surprise I%) EPS W./ rid Sales 1% of co's/

onsumer Staples 96.0% Energy 100.0% Financials 100.0% Health Caro 95.8% Industrials 99.4% Information Technology 99.1% Materials 100.0% Telecommunication Services 100.0% Utilities 100.0% Sows MSS Owns'sSink 487 402 446 422 8ot,S$STtiti EPS (% of of cal % beat % miss EPS surprise I%) EPS W./ rid

apes 3.9% Industrials 1.3% Industrials 1.3% Materials 5.3% Energy Equipment & Services 3.8% Defensives 5.6% Information Technology 5.4% Utilities -4.6% DBUSBRTE (Reasonable PE Tech) -6.0% Telecommunication Services 6.1% Consumer 4.8% Consumer Staples 2.3% Consumer Discretionary 6.8%

als 5.3% Energy Equipment & Services 3.8% Defensives 5.6% Information Technology 5.4% Utilities -4.6% DBUSBRTE (Reasonable PE Tech) -6.0% Telecommunication Services 6.1% Consumer 4.8% Consumer Staples 2.3% Consumer Discretionary 6.8% Health Care 10.1% Consumer Staples 2.3% Information Technology 5.4%

Care -39% 60% 42% 8% Financials -21% 58% 30% 6% Information Technology -63% 71% 53% 6% Telecommunication Services -57% 68% 54% 6% Utilities -141% 85% 14% 0% Sector Total % of companies experiencing "catastrophic loss," 1980-2014 All sectors Consumer discretionary Consumer staple

4% 8% Industrials -58% 64% 37% 7% Health Care -39% 60% 42% 8% Financials -21% 58% 30% 6% Information Technology -63% 71% 53% 6% Telecommunication Services -57% 68% 54% 6% Utilities -141% 85% 14% 0% Sector Total % of companies experiencing "catastrophic loss," 1980-2014 All sectors Consumer

ould be able to retain half of the benefit ($8) and the remainder would be passed on to customers or competed away. For instance, a lasting impact to Utilities’ profits is unlikely, as the benefit would be passed on via regulated pricing. Repatriation: Buybacks could boost EPS by 3% Both Trump and the Blue

rgy 3.9 34 3.9 3.4 Health Care 18.7 16.4 18.7 16.4 Industrials 12.7 11.1 12.7 11.1 Information Technology 64.7 56.6 26.0 22.1 Materials 24 2.1 24 2.1 Telecommunication Services 0.1 0.1 0.1 0.1 Utilities 0.2 0.2 0.2 0.2 S&P 500 ex. Financials & Real Estate 117.0 102.4 78.3 68.5 S&P 500 GAAP EPS impact ($9) ($8) Source: FactS